Lakeview leads city in teardowns

The 1.5-story cottage, left, that dated to 1890 has been demolished, with its much replacement, now under construction, seen in the rendering at right.

On the 3700 block of North Greenview Avenue, construction is under way on a house with five bedrooms, five baths and a rooftop deck. It will replace a humble two-bedroom, one-bath cottage that was there for 125 years before it was demolished last fall.

It's a familiar transition in Lakeview. In the past five years, nearly 300 older residential buildings in the neighborhood have been torn down and replaced with new homes, according to data compiled by Chicago Cityscape, which tracks building-industry permits in the city.

Lakeview is the epicenter of teardowns in the city, with more than twice the number in the second-ranked neighborhood, North Center. There, 124 residential buildings were torn down to make way for new homes from 2011 through 2015.

Bucktown and West Town are tied for third, each with 101 teardowns during those years. Roscoe Village is fifth, with 98.

In all five of those neighborhoods, "the demand for new-construction homes is high enough that it makes financial sense to tear down what is a perfectly functioning building and put up a brand-new replacement," said Mario Greco, a Berkshire Hathaway HomeServices KoenigRubloff Realty Group with several North Side teardowns among his listings. "The buyers get the all-new house they want in the neighborhood they want most."

MAINLY NORTH SIDE

Chicago Cityscape finds teardowns by pairing demolition and new-construction permits the city issues for a single address within 180 days of one another. That happens primarily in North Side neighborhoods, said Cityscape CEO Steven Vance. In South Side and West Side neighborhoods, a demolition permit is seldom followed by an application to build new on the site, he said.

In 2015, all of the estimated 354 residential teardowns in the city—demolitions followed by new construction—were on the North Side, according to Chicago Cityscape's research.

The number of teardowns in Lakeview is testament to the reviving fortunes of North Side builders and their homebuying clients, Vance said, although it also means "a continuing loss of affordable housing in one of the city's most desirable, transit-oriented neighborhoods."

Lakeview has long been a popular place to live. But in the recent years of recovery, it has increasingly been a location where "people come looking for a bigger and newer home than the ones you used to see there," said Azeem Kahn, the president of AK Custom Homes. His firm bought the old 1½-story cottage on Greenview in July for $850,000. The three-story limestone-faced house AK Custom Homes is building on the site is priced at $2.45 million.

Schools are an important source of the demand for larger single-family homes in Lakeview, according to Dermot Logan, a homebuilder whose firm, Eirpol, has teardown projects on the 1300 and 1400 blocks of West Melrose Street.

"If you're going to pay the high property taxes, you're going to get your children one of the better schools," Logan said.

SINGLE-FAMILY REPLACING MULTI-UNIT

His pair of Melrose sites are both served by Burley Elementary, which like fellow Lakeview schools Blaine and Hawthorne has a GreatSchools rating of 10 out of 10. Kahn's Greenview site is served by Blaine.

Many of new single-family homes replace two- or three-flats. On the 3700 block of North Wayne Avenue, the developer who bought a greystone three-flat for $605,000 in September is marketing its replacement, a five-bedroom home with a three-car garage and a wine room, for almost $2.5 million.

In some cases, a new multi-unit building replaces an old one, but with fancier finishes. On the 3600 block of North Fremont Street, Barrett Homes is working on a three-condominium building on the former site of a vintage greystone two-flat it bought for $950,000 in 2014. Two of the new units are duplexes, priced at over $1 million. The middle unit, on one level only, has an asking price of $749,000.

Kahn and Logan both said the vintage homes they've bought as teardowns are often sold by longtime owners or their heirs, who know the existing home would need extensive updating to meet contemporary standards.

"They don't want to spend that money or that time on it," Kahn said.

Buyers also are uninterested in taking on a house that needs updating, said Greco of Berkshire Hathaway.

"There is no demand for fixer-uppers in Lakeview," he said. "It's more of a turnkey neighborhood. People want to buy what they like and move in."